By Yitzhak Samuel
Book Description
Organizational Pathology draws an extended metaphor that the life cycle of an organization is akin to the biological life cycle. Like all living things, organizations will encounter problems that lead to decline and eventual failure. This work discusses the basic problems and life threatening diseases responsible for organizations' failure and death, including organizational politics, organizational corruption, and organizational crime. The book also contains a critical look at crises and fixations; failure and survival; and processes of disbandment and closure of dying organizations.
The consideration of these issues follows a diagnostic model of failure. Yitzhak Samuel argues that if the problems that lead to failure can be predicted or diagnosed early, their severity can be assessed and possible remedies can be implemented to avoid escalating crises. At the very least, an understanding of why and how decline happens can be gained from this analysis. This book offers facts about the causes and consequences of organizational downfall and clues about diagnoses of certain symptoms of abnormal behavior, and how to identify early signs of decline or failure. In order to illustrate these abstract arguments and concepts, Samuel uses various real-life examples of events that have occurred in cross-country contexts. In this way, Organizational Pathology: Life and Death of Organizations should serve a variety of readers.
Although primarily intended for students and scholars in the social and behavioral sciences who are familiar with the study and the practice of organizations, this book's informal style makes it easily accessible to a wide range of readers. Just as Samuel's previous book on organizational politics led to new lines of research and theory, this book will encourage similar studies in organizational pathology and institutional malaise.
Table of Contents
Acknowledgements Preface 1. A Theoretical Framework 2. Organizational Fatality 3. Failure Prediction Models 4. Maladies and Disorders 5. The Spiral of Decline 6. The Perils of Politics 7. Greed and Corruption 8. Corporate Crime 9. Crises and Fixations 10. Failing and Surviving 11. Disbandment and Closure 12. Lessons Learned References Index
Dr Leandro Herrero
Solutionism is a common condition in which the energy and airtime of the organization is consumed in finding solutions to problems. Since there are always problems, solutionism is a self-reinforcing syndrome that can only grow. In fact, once solutionism has been established, it needs to be fed by problems. So the organization creates more and more problems to become more and more proficient in solving them. The patient usually denies this, which is in itself a diagnostic feature.
High levels of adrenaline have been found in this condition, also co-morbid with Busy-ness ( see later in the series).
The best problem is, however, the one that has no solution (similarly to the fact that the best question is the one that has no answer).
Extreme solutionism needs some wicked problems to survive, and once some wicked problems are on the table, solutionism will persist for ever trying to find its Solution Holy Grail, which in fact simply does not exist.
Very often, pervasive solutionism will stop distinguishing between real problems (big or small) and imaginary ones. In fact, it will deal more and more with many problems that do not exist. Which increases the pool of things called problems. Here we go.
The prognosis is usually bad unless solutionism is seriously distracted by something big, or of a higher purpose, where the focus is on building ( a company, a future, an idea, a new culture…) and surrounded by people who have not the word ‘problem’ in their vocabulary.
The condition is thought to be particularly severe in people with MBAs
Like me.
I am on a watch.
Communicate, communicate, communicate, we were told. All the problems go back to communication. This is your default culprit. In doubt, say there was a communication problem and then at least you have just communicated it.
‘Communication’, as problem or not, has become meaningless. It’s equivalent to a breathing problem, or a darkness problem or a sleeping problem. Unless you tell me more, anything can be there, anything goes.
So, if a team does not work, we say they have a communication problem. If strategy is poorly implemented, we blamed it to a communication problem. We say this group or that people don’t listen. That manager does not communicate well. The messages don’t get through.
The organization is seen as a colossal traffic problem, and the leadership team sits at the Traffic Control Centre. If we just adjust and calibrate the content, the pace, the channels and the sequences, all will be fine.
Communications ‘problems’ are seen by people. almost invariably, problems by deficit. Almost never we dare to say that we may communicate too much. And to me there is a significant pathology here: over-communication, instead of lack of it.
The reality is often different. The channels get saturated. The screens are bombarding. The task of redirecting pieces of communication takes up a lot, if not all, of air time. Employees have become information dealers and managers their Information Traffic Wardens.
If there is a pending discipline is the art of communicating less. If we did that, people would have to learn to seek information, to find it, to ask ‘who would know about that?’ Less saturation in the channels would create space for reflection, even thinking – the later, I’m told, has been seen around before and used to be fruitful.
I don’t believe that you solve ‘communication problems’ with more communication. Sure you can control the pain with painkiller drugs, but you’d better understand what that recurrent, nagging, pervasive, ubiquitous pain is all about.
St Francis of Assisi, my favourite saint, patron of Viral Change™ said it: ‘preach the Gospel all the time; when necessary use words’.
Hierarchy is dead, proclaim people in the advanced, enlightened, guru-read organization. Hierarchy is bad, ugly, cause of all problems, constraining, limiting, demode. Let’s get rid of it.
Let’s have a chat with Antoine-Laurent Lavoisier (1743-94). Sorry, a bit late though. Anyway, he postulated the famous ‘Law of Conservation of Mass’: In a chemical reaction, matter is neither created nor destroyed. It’s conserved.
Like hierarchy.
It does not just disappear under self-management practices or Holarctic dogma. It disguises itself and turns up in unexpected places with a different suit: benign project leader, most-vocal-in-the-pack, natural influencers.
Hierarchy means order of things, levels of control. There are always both. To preach de-hierarchical-ization is to preach des-humanization, not the opposite.
Hierarchies can block things and be a pain. They can also facilitate things, provide resources, facilitate people’s work, create conditions, give permissions to act and function as buffers of continuity and reassurance.
Bad hierarchies are a pathology. Premature de-hierarchical-ization is a pathology as well.
Biology has hierarchies. We are alive because of hierarchies.
Actually, in the organization, the traditional top-down hierarchy is not the most powerful of all forms of influence. Peer-to-peer is greater, about 2:1 according to studies including our own in Viral Change™
But preaching its disappearance (fake news) or singing its desired decline and death (wishful thinking) will not get you anywhere.
The treatment of this disease of prematurely preaching death is to learn how to use hierarchy to your advantage. When you re-frame hierarchies as the problem into hierarchies as part of the solution, then you will be in business. Social-political movements know that.
Give me a good, intelligent, committed hierarchy that works supporting the entire distributed leadership system present in any organization, and I will create an organization that flies, feels free, has permissions and goes places.
When I described and created the concept of Backstage Leadership™ years ago, I did no say we were getting rid of the top down hierarchical leadership. In fact, I gave it more homework. Now they also needed to sustain the per-to-peer, spontaneous collaboration bottom-up employee activities whilst not dictating them.
To the old saying ‘Never attempt to teach a pig to sing; it wastes your time and annoys the pig’, I say don’t attempt to preach hierarchy’s death, it will waste your time, it will reincarnate, it will survive you, and, in the meantime, you’ll annoy them the hell of a lot.
In medicine, autoimmune disease is one in which ‘the body produces antibodies that attack its own tissues, leading to the deterioration and in some cases to the destruction of such tissue’.
Organizations have their own immune system diseases.
An organizational autoimmune disease is one in which the exaggeration of immune reactions as ‘defence’ by, say, functions, ends up corroding the very same functions.
(1) An exaggeration and obsession with high performance teams leads to teams which are performing reasonably OK to be constantly pushed to unnecessary high levels of cohesion, with more training, more team building and more uniformity. Results: greater groupthink and less innovation due to a rather incestuous view of the world. Treatment: let teams perform at reasonable levels of excellence (excellence is not perfection) and stop converting the company into a Perfect Teamocracy. Those teams may not have any dis-functionality that require ‘team building treatment’.
(2) The organizational immune system will work as intended, what else?
Organizational systems will prevent themselves from solving problems created by themselves. This is more acute when survival goals are greater than effectiveness goals.
All organizational systems (read functional systems such as HR, communications, strategic planning, project team structure) create their own immune system, even when they profess not to, and say to aim at improvements. The immune and defence mechanisms can be very visible when, for example, these systems create a bubble for themselves with their people talking to each other but rather isolated from the ‘the business’. In those cases, ‘the business’ will use them in an utilitarian way (disguised as ‘business partnership’) for services, problem solving, Bad Cops, or simply to find vendors. Flattering for the bubble. Self-reinforcing.
Suggested diagnostic paths: when invoking externally inflicted system problems, see first if those problems are self-inflicted; this is highly likely. If the system claims lack of empowerment, call the inhabitants bluff and give them on spot, unconditional permission to solve anything.
Also, watch for increasing complexity (e.g. small company duplicating systems of a big company) and increasing length of decision making. Some organizations suffer for ‘the indecision is final’ syndrome’, showing clear symptoms of Information Bias (‘the tendency to seek more and more information when it does not affect action’). The latter is diagnostic of an immune system in hyperactivity (even when it is not obvious what or who is attacking the system). Symptoms: people will ask for more and more market research data, benchmarking, testimonials, references, refinement of questions, new questions, new formats, new round of presentations and anything else that pretend to be crucial. Ask yourself why. Chances are it has nothing to do with the business problem itself. Suggested treatment: challenge ‘the system’ to have 3 people making a decision in 3 days, when is working on 30 people making that kind of decision in 30 days. Suppress the immune system with a surprising high dose of common sense.
The company in rehearsal mode (or Waiting for The Barbarians)
‘Postponing’ (AKA as procrastination) maybe healthy and reasonable, maybe not.
Cultures are created by behaviours. The best predictors of behaviours are previous behaviours. Make a habit of postponing, delaying, waiting for the right opportunity, and soon the culture will have learnt to wait, to postpone everything, those things that needed to be postponed, and the ones that did not.
Procrastination is a habit. It is an individual one. But we are talking here about organizational-cultural pathologies.
Many organizations (mostly the ones who would deny this) work on rehearsal model. Nothing is real today, it’s all for a future, abut to come, but not yet, in which the real thing will take place.
Like Saint Augustine (‘Lord, make me chaste, but not yet’) it’s never the right time to bite the bullet, but they all agree they need to bite it.
When that habit has taken roots, people will be in rehearsal mode for when (here are 10 typical reasons)
We have the right headcount
The leadership team is complete and we have hired those two new people
Next budget
After the potential merger
Once the new guy in HR has come in, just in case he wants to change things
When the split into business units take place
When we have a bit of stability, for goodness say, this has been a moving target
When Joe retires
When the new restructuring is completed
When the culture between A and B has truly integrated
Postponing, procrastinating, running the company in rehearsal mode, is very frequent. There is BTW a handy benign form: nothings should start in June, just before everybody switches off for summer holidays; September is too early after that; October is budget time, no way; then who in his own mind would start just before Christmas?; January, people are still settling; February and March, so packed; Easter holidays are a pain to get people; May will be too late. Surprisingly, the pay check comes season-less, every month
Many time I have asked my clients to read Cavafy’s poem ‘Waiting for the Barbarians’. In the poem, the entire city is preparing itself for the coming of the Barbarians. Here is a bit:
Why isn’t anything going on in the senate?
Why are the senators sitting there without legislating?
Because the barbarians are coming today.
What’s the point of senators making laws now?
Once the barbarians are here, they’ll do the legislating.
But then:
Why this sudden bewilderment, this confusion?
(How serious people’s faces have become.)
Why are the streets and squares emptying so rapidly, everyone going home lost in thought?
Because night has fallen and the barbarians haven’t come.
And some of our men just in from the border say
there are no barbarians any longer.
Now what’s going to happen to us without barbarians?
Those people were a kind of solution.
What would be of many organizations I know without their Barbarians?
Process are supposed to provide these three things
A sure and presumably tested path to address repetitive situations, so that efficiency is ensured
A mechanism to reduce, even suppress, uncertainty
A defence or survival mechanism that ensures the stability of the system
When you put the three of them together, processes become a key piece of the company’s operating system. From how to claim traveling expenses to how to perform massive Due Diligence in front of a potential acquisition, all of those things are processes.
That is one problem. Something that can be so universally applied loses meaning. Saying for example ‘we have (or we don’t) good processes in this company’ is like saying that you have nights and days, or that you have behaviours, or doors.
When people, perhaps more precisely, complain ‘ we have too many processes’, what they usually mean is that organizational life is a cumbersome affair with self-inflicted pain all over the place. Nobody who has ever shared that complain with me has ever explained the ‘too many’. Is there an acceptable number? 17?
Second problem is that, once you have fallen in love with processes (for any of its three reasons: bring efficiency, they are anxiolytic and provides stability) you will need one for anything. Even if you don’t’. What would it be of the now glorious Design Thinking fashion without a process? But Design Thinking surely must be an attitude, some glasses to see the world, something above ‘a process’, not those ubiquitous hexagons. Ah, people remember those hexagons and apparently one can make a lot of money with them.
And three. The very nature of the process makes them a potential ritual. The differences are clear from an anthropological perspective. Rituals are often meaningless and terribly inefficient (rain does not usually come after a few rounds of dancing) bur they are incredible strong and stable. At some point the ritual provides the glue, the belonging, the identity (and the prison), and when that happens, how the whole thing started, or what they tried to ‘solve’ becomes irrelevant. And almost unmovable.
An organization that has heavily ritualized its processes does not have to think too much. And what does not fit in (in one of those) is rejected in all sorts of antibody forms. In those territories, very often, a candid assertion of ‘we don’t have a process for that’ is met with incredulity and desolation leading to ‘we don’t know how to do it’. Here, knowing and having a process become pathologically coterminous.
When I challenge people in this area, I often get a defensive and uncomfortable push back: so, are you telling me we don’t need processes? Kinda offensive if you ask me, because I have never said that. But this push back usually comes from people whose anxiety at the sole idea of de-processing is monumental.
We do need processes, please breath. What we don’t need is addiction. Process junkies (and as we say in old Castilian, haberlos haylos, that is, there are indisputable lots of them), hijack the territories of efficiency and effectiveness, and are never satisfied with a kind-of-process, or mini versions of them.
In the early days of Quality accreditations such as ISO, a high executive of Motorola said that ‘one could get an ISO certification for a life jacket made of concrete as long as it came with the right documentation and a system for relatives to claim’.
Procesism is an illness, a subtle one, because it comes with no fever, actually some elated mood. When its terminal, you don’t have a company anymore, but an automatic machinery. Good for cookies and sausages, mind you.
Over inclusiveness paralysis occurs as a side effect of good intentions. The intentions are usually democratic, egalitarian, based on respect for others, listening to all, involve many.
There is a myth. One that people in organizations don’t like to hear. The myth says that to be part of something (a culture programme, a change, an initiative) people must be personally involved. And we add with a typical business dialect the word ‘own it’. So, people need to ‘own it’, or it won’t work. And to own it, people need to be involved. So, we create legions of people involved in things when they shouldn’t (or don’t want to) but feel the need to be ‘part of it’ (at the very least, just in case it’s something that could affect them). Between being reasonably inclusive and pathologically over inclusive, there is a very fine line that many organizations are happy to cross on behalf of good management. Actually. It is bad management.
Getting involved, ‘own it’, and ‘part of it’ are not the same.
Outside work, we don’t get systematically involved in all things of life around us. Kids sport clubs are running without monthly reports and monthly week meetings with parents. Once elected, local government runs the place without weekly checking with all constituencies and party interests, although these would have access to officials if they want to. In my family we don’t have evening meetings to check upon milestones and make sure that we all ‘are in the same page’.
I would suggest that most things that work have in fact limited inclusiveness, not more.
Not in business. We seem compelled to make sure that everybody ‘gets it’ and all possible constituencies have been invited to the meeting. Outlook calendars are booked until February 2021. Webex, video conferences and conference calls proliferate attended by people who have barely red the briefing. (Occasionally I see healthy multi conference calls run as a sharp check-in between people. They are the exception).
Presenting to somebody who has to present to somebody so he can present to the boss is still normal in many organizations despite the absurdity of the chain, well known for decades.
Being ‘back to back’ in meetings has become and alpha-male and alpha-female sign of self-importance. Organizational life becomes a colossal information recycling system. Busy-ness is a badge of honour and a sign of illness, all in one.
Useless over inclusiveness is still pervasive. It’s always, always, a sign of bad leadership.
Almost there, two to go. I have posted one pathology per day (see the website)
Busyness! From all organizational pathologies this is tricky one because it comes disguised as healthy practice, so the chances of detection are often impaired.
Busy-ness is the opposite of business and the difference is just one letter.
Busy-ness is a semi-permanent state of continuous occupation. The difference between busy-ness and being really busy is that busy-ness is inflated with a lot of nonsense and usually carries a high degree of self-importance.
The being-very-busy people tend to express tiredness from time to time. It’s called being human. The busy-ness people wear a superman or superwomen invisible cape and have high dopamine levels. Not that I have tested them, but I am pretty sure. The reinforcement mechanisms of the brain can hardly cope with the demand. Blip, blip, dopamine, I have to go to another meeting. Blib, blip, dopamine, I am back to back today.
Healthy busy people my slide into busy-ness by the ancient mechanism of flattering. They become busy-ness-on-demand. They become important. Indispensable. Of the type Charles De Gaulle (I have quoted so many times!); ‘the cemeteries are full of indispensable people’.
The problem with busy-ness is that it does not leave too much room for business. People are so busy that they can’t do business.
(A useful diagnostic test goes as follows. What happens with the busy-ness executive(s) go(es) on vacation? If the answer is not much, this is a good diagnostic parameter).
The cure for busy-ness is hard. Additions are hard to shift. Deprivation syndrome is a problem. So you have to go one meeting less at a time, one ‘sorry I can’t’ at a time, one delegation at a time. Easy to say.
As the old saying says, you don’t have to attend every argument for which you have ever been invited. Equally you don’t have to be pulled into any conference call, webex and video conference.
Busy-ness leads to an extended negative consequence (in medical terms its what is called co-morbidity, or illness that tend to come together). This is the additional illness of measuring efficacy, efficiency and effectiveness by the number of activities: the Wednesday afternoon conference call, the twenty workshops, the monthly report, the number of people involved. The most measurable thing is not necessarily the thing that needs to be measured.
Attributed to Peter Drucker, we have inherited the ‘you can’t manage what you can’t measure’. Drucker meant that you need to know if you are successful, so you need to have a way of tracking, of knowing. But out of context, the phrase has become a management fundamentalist mantra, a proxy for numbers.
People who feel that to be a good manager they must measure at any cost, will look around for anything that looks, feels or smells like measurable, and I will forget the small detail of the relevance of the measurement.
This has become an organizational pathology in its own right. In its developed form of disease, the praxis of management becomes defined by the units of whatever seems like a measurement to which I can associate a cost.
A leadership programme becomes a 45 workshops for 50 people each, during 6 months, with 5 trainers and this much of a budget.
A strategy implementation by a Big Consulting Firm becomes 50 (only 50?) consultants, 2 principals, 1 partner, 2 years and this much of a budget.
A deployment of values becomes 3 communication programmes in 6 business units, with 10 workshops each, 6 Town Hall meetings and 5 coaches and this much of a budget.
Here, the activity is the programme (and its busy-ness its proof).
The reality is that you can measure anything, the relevant and the irrelevant, the key factors and the rubbish, the sense of progress and the sense of busy-ness.
At the core of the confusion that many people don’t want to hear is that measurement does not necessarily equals numbers. Many moons ago I had the privilege to learn Decision Analysis (DA) from Larry Philips at the LSE in London on a memorable personal tutorial basis. The Multi-attribute DA preached in the LSE at the time, played with ‘preferences’. Silly and obvious as it may sound many years later, it was a revelation for me to know that when we were saying ‘if we always prefer A to B, and always prefer B to C, then we always prefer A to C’, we were measuring! Etc. A discussion for another day.
The obsession with what is obviously measurable in front of your eyes leads inevitably to blindness to what is not in front of your eyes, not obviously measurable and potential the real key thing to track.
In reality, ‘measurement’ is never a single set of hard data. It’s the combination of many points of insights. The great thing about Multi-Attribute Decision Analysis is that it beautifully manages to merge soft and hard data in the same pot. For example, in the area of ‘cost’, money is only one parameter. Others are, for example, pain of execution, distraction from objectives and, say, probability of p***ing people off. And once you get used to play with the trade-offs (e.g. I am willing to trade half of my cost for one quarter of my pain), you are in different territory.
(10) Empowerment as risk transfer (or the traffic of monkeys across the organization)
Please challenge me on this assumption if you wish, but at least follow my argument.
Managers and leaders say that they empower people when they give them permission (with the associated accountability) to do things that are not in their job description, that they are not supposed to do. If these things were in their job descriptions, we would not call that empowerment, it would be simply pointing to people things that they should do because it is their duty. Managers then would be simply managing, not empowering. Can we agree?
So empowering others is transferring to them three things: new responsibilities, risks, and maybe (maybe) rewards in success. That people could be penalized for failing in things that they are not supposed to do but are given to them (empowered to do), is a conversation that we tend to avoid.
For empowerment is always broadcasted as a good thing. Talking risks would contaminate it too much. And if you did, you would bring along all sort of health warnings. As a client senior manager told me a while ago, he wanted his people to ‘take risks but be prudent’, a kind of safe sex for management.
What I find fascinating is that if risk is transferred to the empowered, that risk must come from somewhere. It must have had a different home, usually the one of the manager who is empowering. It’s… risk transfer.
The great mind, controversial trader/philosopher/writer, Nassim Taleb, who has that ability to annoy most intellectuals, academics, and people who have no ‘skin in the game’, defines the latter as having a share of the consequences of your own behaviours. For example, he would say, an adviser that advises but is shielded from any possible negative consequences of his advice, has no skin in the game. And this is the title of his latest book. Taleb’s thinking behind is ‘the asymmetries’, or lack of them, of those consequences in life. He puts those advisers, people who dictate the invasion of countries (‘interventionists’) and bankers who produced vast misery attributed to ‘unexpected market events’, all of them not bearing any personal consequence, in the same basket: no skin in the game.
In Taleb’s terms (this is my interpretation) a manager who empowers others (in my terms above), who passes risks on, but has no potential share in the consequences of failure; who will not be impacted, or at least not significantly (or as much as the empowered fellow), has no skin in the game. It’s asymmetrical unfairness.
Since empowerment is greatly and naively glorified as solution for all organizational ills, the manager who empowers always wins (as good manager, good role model, good delegator). If things go wrong, the magic organizational deity called ‘they’ comes down to earth: they failed, they took too much risk (of yours?), they did not understand, they did not take the right empowerment, they…
Pseudo-empowerment of the type ‘passing the monkey-package of responsibility plus risks’ (with no Talebian skin in the game) has a sister called Attribution Bias. It goes like this. If they fail it was their fault (lack of skills, mistakes, blunders). If I succeed, it’s my ability and merit to empower. If they succeed, they are lucky. If I fail it would be all the accumulation of negative circumstances in which I was forced to manoeuvre. Like the bankers in a market crash.
For me, real empowerment (not the pseudo passing the monkey type of having more responsibilities, taking all risks, by the way being prudent, and not forgetting to be joyful with the opportunity) must be symmetrical between the empowering and the empowered. The empowering person must have his share of potential negative impact if things fail in the empowered territory; also, positive rewards.
You could say that a manager that empowers others has skin in the game in terms of reputation, for example. Again, that is first a hypothesis in search of validation. Organizational life, as I mentioned above, is fairly comfortable with glorifying those who empower and then forgiving them if the empowered troupes screw up. And this is because, in politically correct management land, we always want more empowerment, because empowerment ‘is good’, period. And Attribution Bias is always at the gates for a rescue.
However, to elevate the confusion to a higher level, as an old friend used to say, in many places ‘empowering people’ is synonymous with ‘for goodness say do the damned job’ (as I say, often a job that you were supposed to do anyway, but that is not seen as performing). In truth, the whole territory of empowerment is muddy waters, or perhaps Bermuda Triangle. It has become meaningless.
And for me, restoring meaning entails ‘symmetrical skin in the game’ a la Taleb. At least, we should consider it as working definition. It would be good for clarity, transparency and efficiency; and will decrease the traffic of monkeys in the organizational jungle.
